Tracking a fifth day of gains for global stock indexes on positive cues, Indian stocks rose on Thursday as central banks may be close to shifting gears down on aggressive monetary policy.
The BSE Sensex index jumped 354.43 points or 0.6 per cent to 59,898.39 and the broader NSE Nifty rose 114.50 points or 0.65 per cent to 17,770.85, returning from vacation for Diwali celebrations on Wednesday.
Indian equity benchmarks had enjoyed a seven-day rally, including gains in the one-hour Muhurta trading window on Monday, marking the start of the Hindu Samvat year 2079, before falling on Tuesday.
This week, the Indian stock markets were closed on Wednesday and only open for a one-hour Muhurta trading session on Monday.
Gains in domestic stocks will likely be marginal as oil prices edged higher in early Asian trade on Thursday following a session-high rise of over 3 per cent on record-breaking US crude shipments.
India is the third largest importer and user of oil in the world, and increases in crude oil prices directly affect inflation and affect capital flows.
Asian shares rose, tracking the index of global stocks, on a fifth day of gains, its longest stretch in more than two months.
While the stock of Meta Platforms fell 24 per cent in overnight trade, US futures rose in the early Asian hours.
As investors worried about tech profits on Wednesday, the S&P 500 closed lower, falling for the parent company of Facebook, Amazon, Alphabet and Microsoft.
But market fears have subsided, and the dollar’s progress has been muted, fueled by growing confidence among investors that the Federal Reserve and other central banks may ease their aggressive rate-hike strategies.
“Yields are generally lower globally as expectations of central bank tightening have eased further,” Taylor Nugent, markets economist at National Australia Bank in Sydney, told Reuters.
Despite the challenges for stock market investors, central banks are sending out encouraging signs that perhaps less harsh monetary tightening is on the way.
On Wednesday, the Bank of Canada raised interest rates by a smaller margin than expected, supporting the theory that the Federal Reserve is also approaching a fall.
But not everyone is convinced.
In an interview on Bloomberg TV, Nancy Daud, a private wealth advisor at Ameriprise Financial, said, “The only relief that will stop them will be a sign that inflation is coming down and we’re not quite there.” “They will stick to their guns and raise rates in November and again in December.”